Integrating Suppliers into New Product Development

OVERVIEW:New product development is becoming increasingly risky, expensive and reliant on disparate knowledge bases spread across multiple firms. Many organizations are devolving design responsibility to their suppliers in order to meet these challenges, yet may lack appropriate knowledge of “best practice” in managing supplier integration. For example, how to adjust their management practices to the timing of supplier integration and the degree of design responsibility award to suppliers. A survey of 134 global industrial organizations, and their efforts to integrate suppliers into their new product development processes, shows that early assessment of supplier capabilities and setting joint technology goals can improve the effectiveness of NPD project teams, and lead to improved product design and financial outcomes for the firm.